Germany is the biggest loser in 2017

As Donald Trump attempts to make a wholesale shift in American domestic and foreign policy, there are bound to be winners and losers economically and politically. Leading German government representatives from Sigmar Gabriel to Frank Walter Steinmeier to Angela Merkel have all taken vocal stances, warning against Trump’s policies. But I believe these warnings will not be taken onboard in friendship. Instead, I believe Donald Trump will see Germany as an unfaithful ally and move more forcefully in a direction that will weaken Germany’s hand politically. And so, Germany risks being one of the losers politically in 2017 – something that plays right into Vladimir Putin’s hands.

On Barack Obama’s farewell tour, the American President had unflinching praise for German Chancellor Angela Merkel. And the kind words were mutual. These two leaders clearly saw eye to eye on a political and policy level, forging a deep personal bond in the process. But now that Obama has left office, not a night goes by in which the three major German news programs – Tagesschau, Tagesthemen and Nachtmagazin – fail to express alarm at the abrupt shift in US policy.

It’s safe to say that, after eight years under Barack Obama’s presidency in which Germany and the United States were mostly in lockstep ideologically, Germans are shocked at the arrival of Trump in the White House and his policies.In no other country whose news programs I follow regularly is there such a deep sense of disappointment, outrage and befuddlement as in Germany.

Equally, the outrage at Trump’s policies at the highest levels of German politics is palpable. Below are a few examples of recent statements:

Then Economics Minister Sigmar Gabriel on German cars (16 Jan): ““The US car industry would have a bad awakening if all the supply parts that aren’t being built in the US were to suddenly come with a 35% tariff. I believe it would make the US car industry weaker, worse and above all more expensive. I would wait and see what the Congress has to say about that, which is mostly full of people who want the opposite of Trump.”…Asked what Trump could do to make sure German customers bought more American cars, Gabriel said: “Build better cars.””

Then German Foreign Minister Frank Walter Steinmeier on Trump (24 Jan):“As always when power changes hands, there are uncertainties, doubts and questions about the course the new leadership will take. But in these times of a new global disorder it is about more, and there is a lot at stake today — with the election of Donald Trump the old world of the 20th century is over for good.”

Then German Foreign Minister Frank Walter Steinmeier on Trump (27 Jan): “I was appalled for more than a year over the American campaign..This isn’t about little things. It’s about fundamental questions in our self-understanding, for instance in the approach to torture.”

German Foreign Minister Gabriel on the US immigration freeze (28 Jan): “The United States is a country where Christian traditions have an important meaning. Loving your neighbor is a major Christian value, and that includes helping people”

Merkel spokesman Steffen Seibert on the US refugee freeze (29 Jan): “The … refugee convention requires the international community to take in war refugees on humanitarian grounds. All signatory states are obligated to do. The German government explained this policy in their call yesterday.”

German Chancellor Angela Merkel on the US refugee freeze (30 Jan): “The necessary and decisive fight against terrorism does not justify a general suspicion against people of a certain belief ― in this case people of Muslim belief or people from a certain country. That way of thinking is against my interpretation of the basic tenets of international refugee support and cooperation.”

The CSU’s Horst Seehofer isn’t making anti-Trump commentary and I don’t recall Wolfgang Schäuble making negative comments either. But across the board, comments from politicians in Germany’s two major parties, now in a coalition government, are decidedly negative on Donald Trump. I think there is good reason to be worried about Trump given the authoritarian character of his signature executive orders to date. Nonetheless, it bears noting that German politicians are universally negative and more vocal than politicians in any other major developed country.

I think this matters. First of all, Theresa May, despite likely differences of opinion with Trump, did her level best to present a united front with the new American President. She even held Trump’s hand during her state visit. It may sound silly, but these things matter – especially to Donald Trump.

It was already clear that Trump was turning toward a more Anglo-American foreign policy. But now, with the criticism from Germany from all sides, it is clear that – when it comes to Europe, the Trump Administration will now turn increasingly toward the UK instead of Germany. Just yesterday, news agencies were talking of how Trump’s likely pick to be US Ambassador to the EU, Ted Malloch, was deeply eurosceptic, warning that the euro could collapse in the next 18 months. Last Wednesday, he even said he would “short the euro”.

So any guff you hear about Donald Trump’s commitment to existing alliance partners, to the EU, or to NATO, or anything else has to be taken with a grain of salt. Yes, Trump will make obligatory statements about nominal commitments to some existing relationships in principal. But the tenor of those relationships is definitely going to change. And the tenor of the German-American relationship will worsen.

And of course, this suits Vladimir Putin just fine because he knows that after the French elections, Angela Merkel will be the only leading voice in Europe who is committed to a liberal world order led by NATO and the European Union allied with the US. Deposing Merkel or diminishing her power is a major goal of the Kremlin.

As it stands now, Germany and the United States have an increasingly antagonistic relationship. Unless, German politicians change their tune, chances are this antagonism will result in a cooling of the US relationship with Germany, with the EU and with NATO as the primary vehicle to show Western military power. And Germany will lose stature on the world stage just as the German people are going to the polls to elect a new Chancellor.

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.